Hourly rate to salary
What an hourly rate works out at over a year, before and after tax.
- A day, at your hours
- £0
- A week
- £0
- Income tax and National Insurance
- £0
- Take-home per hour worked
- £0
The number of weeks is the decision
Multiplying a rate by hours is trivial. Choosing how many weeks to multiply by is where the answer is actually made, and it is where most comparisons go wrong.
If you are salaried, use 52. Your holiday is paid, so every week of the year carries income. If you are paid only for hours worked, you must take off the weeks you do not work. Someone taking five weeks of unpaid leave is on 47 paid weeks, and using 52 overstates their income by more than 10%.
Casual and agency staff are often paid holiday as an uplift of 12.07% on the hourly rate instead of as paid time off. If your rate includes that, 52 weeks is right. If it does not, it is not.
The take-home per hour is the honest comparison
When weighing one job against another, the useful figure is at the bottom of the table above: what you keep for each hour you actually work. A higher rate with longer hours can leave you worse off per hour once the extra earnings cross into the 40% band, and comparing headline rates hides that entirely.
What this leaves out
Overtime at a different rate, shift premiums, unpaid breaks, pension contributions and student loan repayments. Add the last two on the take-home pay calculator. If you are comparing an employed rate against a contract day rate, the day rate calculator is the fairer comparison, because a day rate has to cover holiday and pension that a salary provides.
Common questions
- How many weeks should I use in the year?
- Fifty-two if you are salaried and paid through your holiday. If you are paid only for hours worked, take off your unpaid weeks: 46 to 48 is realistic once holiday is accounted for, and using 52 will overstate your income.
- Does holiday pay change the answer?
- For a salaried job, no, it is already inside the figure. For hourly work it matters a great deal. Casual and agency staff often receive holiday pay as an uplift of 12.07% on top of the hourly rate, so check whether your rate includes it or not.
- Why does my take-home not double when my rate doubles?
- Because tax is progressive. The first £12,570 is untaxed, then 20%, then 40% above £50,270. Doubling a rate that pushes you into the higher band means the second half is taxed considerably harder than the first.
- Is the National Living Wage an hourly figure?
- Yes, and it changes every April. If you are checking whether a rate is legal, use the current rate on GOV.UK rather than an old one, and remember it varies by age.